With a high degree of flexibility offered, licences could be highly beneficial to start-up businesses, as it may not be possible to forecast sales volumes, activity levels and space requirements over a long term. It could also be highly advantageous if you are a small business and are looking for short-term property solutions, such as serviced offices, additional parking arrangements or setting up a temporary shop (i.e. Christmas shops). A Licence is an ideal agreement to cover this type of situation.
The advantages of a licence include:
The main disadvantage of entering into a licence as a tenant, is that you have no right to renew the licence once it has expired. This is one of the main reasons why many landlords prefer to offer licences instead of leases, so an upturn in market rent can be reflected in the rents being charged.
Choosing the Right Location for Your Commercial Property